The by-laws were initially expected to be drafted by year-end but industry sources say the government is keen to speed up implementation in view of the earlier delays in appointing the CMA board and the buoyant market conditions. Once the new legal and regulatory framework for the Saudi capital market is enforced, several international investment banks will start operating in the kingdom. The first such entity is expected to be a joint venture investment bank formed by HSBCand Saudi British Bank (SABB), which is understood to be ready to start operating once the CML is in force.

The first IPO for a private company to be launched under the new CML will be for the local Almarai Company, the kingdom's largest dairy producer. The offering, due before the end of the year, will be lead managed by HSBC and SABB.

Both banks will also handle the first IPO to be launched as part of the government's privatisation plans - the sale of a majority stake in National Company for Co-operative Insurance (NCCI). The sell-off will see 50 per cent of NCCI's shares held by the Public Investment Fund (PIF) ceded to the public, while the General Organisation for Social Insurance (GOSI) and the Retirement Pension Agency, both of which have a 25 per cent stake in NCCI, are expected to divest 10 per cent each. The transaction is also due to be completed by year-end.

A third IPO lined up for the fourth quarter is for Ittihad Etisalat, the consortium led by the UAE's Emirates Telecommunications Corporation (Etisalat)in charge of rolling out the kingdom's second GSM network. Under the licensing process, the consortium is required to list on the local stock exchange and offer 20 per cent of its shares to the public immediately.

It is understood that Samba Financial Grouphas been awarded the mandate to lead manage the IPO.

Yet another offering to take place before the turn of the year is for Al-Bilad, the new Islamic bank formed out of eight local foreign exchange houses. Gulf International Bankhas been mandated to arrange an initial public offering (IPO) of 50 per cent of Al-Bilad's shares (MEED 20:8:04).

Several other companies are gearing up to launch IPOs once the CML has come into effect. These include The Power & Water Utilities Company for Jubail & Yanbu (Marafiq), Saudi Dairy & Foodstuff Company (Sadafco)and Jeddah-based National Commercial Bank (NCB).

The CMA will regulate investments, securities and the new stock exchange, including the national securities depository. It will register securities offered for subscription or sale to the public, protect the integrity of the securities market against manipulation and insider trading and review and approve and regulate mergers and acquisitions and other business activity.

The CMA will be complemented by the establishment of the stock exchange, which will be a private joint stock company and take over the existing Tadawul system. The exchange's board will consist of nine members, three from the government, four representing brokers and two representing listed companies.